Forms of Business Ownership

Why is it a good idea to create a partnership agreement?

• ALL are correct.

• To separate the business, if necessary

• To have a dispute resolution plan

• In case of the untimely death of a partner

What is the most significant risk factor in a sole proprietorship?

• Having no regular schedule

• Doing all of the work

• Having to answer to a board of directors

• Unlimited liability, even for employee actions

How are taxes handled in a partnership form of business ownership?

• The business passes only its profits to the owners, and they claim the profits on their personal tax return.

• The business passes its profits and losses to the owners, and they claim the profits and losses on their personal tax return.

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• The business passes its profits and losses to the owners, and they claim the profits and losses on their sole proprietorship tax return.

What is the main disadvantage of being a sole proprietor?

• High start up costs

• Limited skills

• Unlimited liability

A sole proprietorship is taxed only once.

• false

• True

An advantage of a partnership is having access to more

• Capital

• Partnership

• more taxes payers

The simplest form of business ownership is a:

• proprietorship.

• partnership.

• corporation.

• cooperative

Which of the following is an advantage of a sole proprietorship?

• ease of starting a business

• being your own boss.

• pride of ownership.

• all of the above.

is a business with two or more owners

• corporation.

• conglomerate

• partnership

• public corporation.

Which of the following is probably the most important reason for incorporating (forming a corporation)?

• limited liability of shareholders

• more money for investment

• increased flexibility.